LIC Jeevan Utsav Plan 771 – As of October 1, 2024, the Life Insurance Corporation of India (LIC) re-launched its popular Jeevan Utsav Plan with the updated plan number 771, introducing a range of benefits designed to offer policyholders comprehensive and lifetime insurance coverage. The LIC Jeevan Utsav Plan 771 addresses the essential need for financial security with benefits that extend throughout a policyholder’s life, even beyond the active premium-paying years. This article explores the significant features and terms of the revised Jeevan Utsav Plan, emphasizing its benefits for individuals seeking both insurance coverage and guaranteed income.
Also see: LIC Jeevan Umang 745 vs LIC Jeevan Utsav 771
Key Features of LIC Revised Jeevan Utsav Plan 771
The Jeevan Utsav Plan is designed to provide policyholders with lifelong insurance coverage and stable income benefits. Here are some standout features of this policy:
- Whole Life Coverage: Unlike many life insurance plans that cease coverage upon reaching a certain age, Jeevan Utsav offers whole life insurance, ensuring policyholders are covered throughout their lives. This feature is especially advantageous for those who want lifetime financial protection.
- Lifetime Guaranteed Income: Policyholders receive 10% of the basic sum assured as annual guaranteed income after a certain period. This Income Benefit continues for the policyholder’s lifetime, providing a steady financial return in addition to the insurance cover.
- Flexible Premium Payment Terms: The premium-paying term ranges from 5 to 16 years. This flexibility allows policyholders to select a premium term that best suits their financial situation. Notably, the minimum premium-paying term in LIC Jeevan Umang is 15 years, making Jeevan Utsav more accessible for those preferring shorter commitment periods.
- Guaranteed Additions: Unlike traditional plans where bonuses may vary based on performance, Jeevan Utsav offers Guaranteed Additions during the premium-paying period, adding a layer of reliability to the returns.
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Eligibility and Conditions
To be eligible for this plan, a policyholder must meet the following criteria:
- Minimum Age: The minimum entry age is 30 days, making it suitable even for newborns.
- Maximum Age: The policy can be purchased by individuals up to 65 years.
- Payment Modes: The Jeevan Utsav Plan 771 allows for multiple payment frequencies—monthly, quarterly, semi-annually, or annually. For monthly payments, an NACH (National Automated Clearing House) option or salary-saving schemes can be utilized, with a requirement of a three-month advance payment under the NACH option.
- Premium Payment Terms: The premium paying term is flexible, ranging from 5 to 16 years. Policyholders can choose any term within this range based on their preference and financial planning goals. Additionally, specific age requirements apply depending on the chosen premium-paying term:
| Premium Paying Term | Minimum Age at Entry (Completed) | Maximum Age at Entry (Nearer Birthday) |
|---|---|---|
| 5 | 8 years | 65 years |
| 6 | 8 years | 65 years |
| 7 | 8 years | 65 years |
| 8 | 8 years | 65 years |
| 9 | 7 years | 65 years |
| 10 | 6 years | 65 years |
| 11 | 5 years | 64 years |
| 12 | 4 years | 63 years |
| 13 | 3 years | 62 years |
| 14 | 2 years | 61 years |
| 15 | 1 years | 60 years |
| 16 | 30 days | 59 years |
- For a 16-year premium-paying term, individuals from 30 days to 59 years can enroll.
- For a 10-year premium-paying term, the minimum age is 6 years and the maximum is 65 years.
- For a 5-year premium-paying term, individuals aged 8 years to 65 years are eligible.
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Sum Assured
In the LIC Jeevan Utsav Plan 771, the minimum sum assured is set at ₹5 lakh. However, this amount only serves as a baseline for calculating the insurance coverage, not as the amount that the policyholder is required to pay. Importantly, there is no upper limit on the maximum sum assured, allowing policyholders to choose their desired coverage level without restrictions, making it ideal for those who want substantial insurance protection.
Example of Premium Calculation
Here is an example of how the LIC Modified Jeevan Utsav Plan 771 will work based on the general terms:
To illustrate the functioning of the LIC Modified Jeevan Utsav Plan 771, let us assume the following scenario:
- Policyholder age: 30 years
- Sum Assured: ₹10 Lakh
- Premium Payment Term: 16 years
Based on this example, the annual premium including GST will be ₹61,393.75 for the first year, which includes 4.5% GST in the first year. From the second year onwards, the GST rate reduces to 2.25%, bringing down the annual premium to ₹60,071.88. The policyholder has flexible options to pay this premium annually, half-yearly, quarterly or monthly.
The premium-paying term of 16 years requires the policyholder to make these payments continuously for the entire term. Once the 16-year premium term is completed, there is a grace period of 2 years before the benefits start. So, at the end of the 18th year, the grace period ends, and from the 19th year, the policyholder will start receiving survival benefits or income benefits.
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As per LIC survival benefit schedule, the timing of these benefits depends on the premium-paying term selected:
| Premium Payment Term | Income Benefit Start Year |
|---|---|
| 5 years | 11th year |
| 6 years | 11th year |
| 7 years | 11th year |
| 8 years | 11th year |
| 9 years | 12th year |
| 10 years | 13th year |
| 11 years | 14th year |
| 12 years | 15th year |
| 13 years | 16th year |
| 14 years | 17th year |
| 15 years | 18th year |
| 16 years | 19th year |
- 16-year term: Benefits start in the 19th year.
- 10-year term: Benefits start from the 13th year.
- 5-year term: Benefits start from the 11th year.
In this example, with a 16-year premium term, the policyholder starts receiving annual income benefits from the 19th policy year, which is 10% of the basic sum assured or ₹1 lakh per year – which continues for the lifetime of the policyholder.
Also see: LIC Jeevan Tarun Plan 734
Survival Benefit Options
LIC offers two options under the survival benefit:
- Option 1 – Regular Income Benefit: This option provides a yearly payout of 10% of the basic sum assured, which continues for the policyholder’s entire lifetime. For example, with a basic sum assured of ₹10 lakh, the policyholder would receive ₹1 lakh annually for life, ensuring a stable, long-term income stream.
- Option 2 – Flex Income Benefit: This option also offers 10% of the basic sum assured annually, but with added flexibility. If the policyholder opts not to withdraw the benefit in a given year, the unclaimed amount accrues interest at a compounded rate of 5.5% annually. This compounding feature allows for growth on the unused balance, providing a potential increase in total returns over time.
Also see: LIC Bima Shree Plan 748
Surrender Value
The Jeevan Utsav Plan does not offer a traditional maturity benefit. However, policyholders have the option to surrender the policy after one year to receive the accumulated surrender value. This feature provides a degree of liquidity for policyholders who may need to withdraw their investment before the policy’s intended end.
Guaranteed Addition
LIC offers a Guaranteed Addition of ₹40 per year for every ₹1,000 of the sum assured. For example, if the policyholder’s sum assured is ₹10 lakh, the Guaranteed Addition would amount to:
- 10,00,000/1,000×40 = ₹40,000 per year
This Guaranteed Addition accumulates annually throughout the premium-paying term. So, if the policyholder has selected a 16-year premium-paying term, the total Guaranteed Addition by the end of that period would be:
- 40,000×16 = ₹6,40,000
This amount significantly enhances the policy’s value, as it is added to the benefits received by the policyholder’s nominee upon death or the surrender value if the policyholder decides to surrender the policy.
Death Benefit
In case of death of the policyholder, the nominee receives the Sum Assured on Death, which is calculated based on the Basic Sum Assured or 7 times the annual premium or 105% of total premiums paid, whichever is higher. In addition, guaranteed additions accrued during the premium paying term are also provided. This combination of Sum Assured on Death and Guaranteed Additions enhances the death benefit, thereby providing adequate financial protection to the nominee.
Example of Death Benefit
Here’s an example of death benefit
Assume that a policyholder with a ₹10 lakh sum assured and a 16-year premium-paying term unfortunately passes away in the 26th year of the policy. The key components of the death benefit include the sum assured and the guaranteed additions accumulated during the premium-paying term.
Guaranteed Additions:
In this policy, guaranteed additions are only applied during the premium-paying term. Since the policyholder’s premium term was 16 years, we calculate guaranteed additions based only on this period.
With a guaranteed addition of ₹40,000 per year for a ₹10 lakh sum assured, the total guaranteed addition over 16 years amounts to ₹6.4 lakh.
Sum Assured on Death Calculation:
The death benefit, or “sum assured on death,” is determined by the higher of:
- The basic sum assured (₹10 lakh),
- 7 times the annual premium,
- 105% of total premiums paid.
In this example, let’s assume the seven-times premium calculation is less than ₹10 lakh, making ₹10 lakh the higher amount and thus the chosen sum assured on death.
Total Death Benefit:
Combining the ₹10 lakh sum assured with the ₹6.4 lakh in guaranteed additions, the nominee would receive a total death benefit of ₹16.4 lakh.
Optional Riders for Enhanced Protection
The plan offers four rider options to enhance coverage:
- Accidental Death and Disability Benefit Rider
- Accidental Benefit Rider
- Term Assurance Rider
- Premium Waiver Benefit Rider
The Premium Waiver Benefit Rider is particularly beneficial for policies purchased for children, ensuring policy continuity without additional premiums if the proposer passes away.
Critical Illness Rider
There is no Critical Illness Rider in this policy as of now
Surrender benefit
Surrender the policy can be surrendered by the policyholder at any time provided 1 full year premium have been paid
Policy Loan and Grace Periods
After maintaining the policy for one year, policyholders are eligible to apply for a loan against the policy. The interest on the loan is payable biannually, providing financial flexibility.
For missed payments, LIC grants a grace period of 15 days for monthly premiums and 30 days for other premium frequencies. This feature accommodates policyholders who may face short-term financial challenges, helping them keep the policy active without incurring late fees.
Revival Option for Lapsed Policies
If the policy lapses due to non-payment, LIC provides a 5-year revival window during which policyholders can reinstate the policy by paying outstanding premiums with applicable interest.
Conclusion
The LIC Revised Jeevan Utsav Plan 771 combines lifelong coverage, guaranteed income, flexible premium options, and additional riders to create a robust financial solution. This plan is well-suited for those looking for long-term financial security, guaranteed returns, and flexible premium-paying terms. With the option for whole life coverage, Jeevan Utsav ensures that policyholders and their families remain financially protected across different life stages, making it a valuable addition to LIC’s lineup of insurance solutions.
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